Caledonia plans to spend $132 million this year on Zimbabwe’s biggest gold mine; new project to cost half a billion dollars

By Reuters

HARARE: Caledonia Mining Corporation plans to spend $132 million this year to launch development of what, once operational, will be Zimbabwe’s largest gold mine, the company announced on Wednesday.

Miners are riding a wave of record bullion prices to expand output. Spot gold prices hit another record high of $4,639.48 an ounce early on Wednesday, fuelled by escalating tensions in Iran, concern over the Federal Reserve’s autonomy and softer inflation readings that boosted rate cut bets.

Caledonia said in a production update that the planned spending, part of a $162.5 million total capital expenditure programme for 2026, was subject to board approval and availability of funding.

Caledonia already operates the 80,000-ounce-per-year Blanket mine in Zimbabwe.

“We are pleased to report that Blanket has once again delivered production in line with guidance, demonstrating the resilience and operational excellence of our team,” said CEO Mark Learmonth.

“The FY 2026 production guidance of 72,000 – 76,500 ounces reflects the increased consistency we are focussed on from Blanket.”

The company plans to develop the Bilboes mine at a projected total capital cost of $584 million.

“Our FY 2026 budget reflects our commitment to sustained investment in both our core operations and future growth,” Learmonth explained.

“The planned capital expenditure will support ongoing production at Blanket and advance the development of the Bilboes project and exploration at Motapa where we see long term, value enhancing synergies with Bilboes.

“We remain focused on investing in safety and delivering long-term value for all our stakeholders.”

Production from the new mine is expected to begin in late 2028, with steady-state annual output of 200,000 ounces anticipated from 2029 for an initial period of 10 years.

The company has said it plans to fund the Bilboes project through a mix of non-recourse senior debt, contributions from existing operations as well as specialised financing methods such as streaming, where investors provide cash in return for future metal supply.

Caledonia’s expansion plans received a boost last month when Zimbabwe’s government reversed plans to double the gold royalty rate and change the tax treatment for capital expenditure.